Paying off your mortgage sooner is critical because the longer you put off repayments, the more you’ll end up paying as interest continues to accrue on your outstanding loan balance. Also, if you get rid of your debt faster, there’s a chance to improve your retirement and overall financial freedom.
When it comes to mortgage repayments, there are a few easy ways you may be able to deal with it sooner. In turn, it can reduce the overall amount you’ll have to pay.
Tackle how to pay off your home loan quickly and start to live a debt-free life by trying these best practices.
Make additional payments
You can ask your loan provider about their repayment flexibility to avoid winding up being penalised for making additional payments. Check with them if they allow increased repayment at all and if it’s applicable to your type of home loan.
Often with variable-rate loans, you’ll be allowed for additional payments. Upping the amount you repay with a variable interest rate can lessen the interest you’ll be charged, which saves you money.
While most fixed-rate loans don’t allow making additional payments, there may be some that do. Although, the amount that can be repaid early may be limited. Early repayment fees and early exit fees may also apply.
Change payment frequency
If you want a bigger effect on your loan, increase the frequency of your payments. Usually, the more often you repay, the less interest you’ll have to pay off as interest is calculated daily.
Instead of monthly, you can switch to making fortnightly repayments, which make you pay your loan off quickly. In a year, there are 26 fortnights. You may pay off an extra two weeks without noticing a huge difference compared to monthly repayments.
Refinance your mortgage
It’s good to always look out for better loan interest rates. With refinancing to a lower interest rate, you’ll have less monthly repayments. This can save you money over the course of the loan term.
Given you’re in a healthy financial standing, you may be able to negotiate a better interest rate on your loan. In this case, keep doing the same repayments you were required so you can pay off your home loan faster.
ASAG Reverse Mortgage: Refinance without ongoing payments
If you’re a senior homeowner looking to refinance without ongoing payments, one of our equity release solutions — reverse mortgage, is possibly what’s suitable for you.
Refinancing is another way to unlock equity in your home to fund your retirement. The ASAG Reverse Mortgage allows you to access the wealth in your home for funding without selling or losing your home. The funds can be used for different acceptable purposes, such as Senior Refinancing, as you enjoy your retirement comfortably and securely.
There are no ongoing repayments with our reverse mortgage as it is paid off when you permanently leave your home, either you downsize, move to aged care, or pass away. However, you may choose to make early repayments without penalty.
Our friendly ASAG team can assist you with further information on how our reverse mortgage works by calling us on 1300 002 724 or sending your enquiries at firstname.lastname@example.org.
You can also get started with your assessment of your available equity using our tool below.